Disciplinary notices

Jennifer Wales

Student Member Number

S84152

Charges

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee (“the Committee”) has found Ms Wales, a CA Student Member formerly employed by Deloitte LLP in Aberdeen (2014 – 2016), guilty of professional misconduct on the following grounds:

In May 2016, with regard to journal entry testing work for an audit client of the firm (“Company A”), Ms Wales misrepresented to Company A, and to colleagues within the firm, that:

(a) she had sent sample selections in respect of this work by email to Company A; and

(b) this work had been undertaken respectively for separate entities within Company A, when the documents she subsequently produced for the work were identical, except for different file names.

In May 2016, Ms Wales misrepresented to a colleague in the firm that, in December 2015, she had raised a ‘Bank Confirmation Letter Request’ to the Audit Confirmation Centre in respect of an entity of one of the firm’s audit clients. Further, when asked to demonstrate this action, she produced an email confirmation receipt which she had improperly amended to misrepresent that the request had been made at the correct time.

On 7 March 2016 and thereafter, Ms Wales misrepresented to her colleagues in the firm that she was unable to attend work on account of a family emergency.

On 7 June 2016 and thereafter, Ms Wales misrepresented to her colleagues in the firm that she had been unable to attend work due to health issues.

Which actions constitute a breach of the fundamental principle of integrity, as set out in Sections 110.1 and 110.2(a) of the ICAS Code of Ethics, and also the fundamental principle of professional behaviour, as set out in Section 150.1 of the Code.

Sanction

Under operation of Investigation Regulation 2.16, Ms Wales has accepted an order to terminate her training contract and her status as a CA Student Member, effective as of 14 November 2016.

Commentary

The issues in question were brought to the attention of ICAS by Deloitte LLP, following the termination of Ms Wales’ contract of employment in July 2016.

At an early stage in the investigation, Ms Wales confirmed to the Investigation Committee that she fully accepted all the allegations made against her.

While taking account of Ms Wales’ relative inexperience, the Committee considered that her actions demonstrated a serious departure from the ethical standards which CA Student Members are expected to observe.

With reference to the fundamental ethical principle of integrity, Ms Wales failed to be straightforward and honest in a professional relationship, with a lack of truthfulness. By altering a number of documents to support her misrepresentations, she was knowingly associated with information which was materially false and misleading.

With reference to the fundamental principle of professional behaviour, Ms Wales’ misrepresentations demonstrate behaviour which adversely affects the good reputation of the accountancy profession, with members of the public reasonably entitled to expect that CA Student Members are truthful and honest at all times.

Taking all circumstances into account, the Committee considered that Ms Wales’ actions were incompatible with the standards expected of a CA Student Member.

With Ms Wales’ consent, the Committee has terminated her training contract and CA Student Member status.

(September, 2016)

For clarity, this notice does not relate to Jennifer Wales CA (Member number M29564), previously employed by Deloitte LLP and currently employed by Edrington in Glasgow.

Richard Beattie CA

Richard Gordon Beattie, a member of the Institute of Chartered Accountants of Scotland based in Glasgow, has had his practising certificate withdrawn for a period of 7 years and has been issued with a severe reprimand following a hearing of the Discipline Tribunal. In addition Mr Beattie was ordered to pay the costs of ICAS in the sum of £13,000 and the costs of the Discipline Tribunal of £1150.

Mr Beattie admitted six charges of professional misconduct in respect that on charge 1 he failed to pay within a reasonable time, monies received or held and due by a LLP to HMRC with a liability of £162,105.02; on charge 2 he failed to file accounts for the LLP as required by Section 17 of The Limited Liability Partnerships (Accounts and Audit ) (Application of Companies Act 2006) Regulations 2008; on charge 3 he transferred the LLP’s assets ( with the exception of its outstanding debtor book ) including its goodwill, fixed assets and work in progress to another limited company of which he was a director and shareholder, for no consideration, to the prejudice or potential prejudice of the LLP and its creditors; on charge 4 when he knew or ought to have known that the LLP was insolvent, transferred the main asset of the LLP, its outstanding debtor book to his own company ( R G Beattie & Co Ltd ) for the sum of £10,000 to the potential prejudice of the LLP and its creditors; on charge 5 he failed to wind up the LLP to the potential prejudice of its creditors; and on charge 6 he caused or materially contributed to the insolvency of the LLP leading to a winding-up order being made.

Peter Anderson, Discipline Board Chairman, said “ The failure to make payment of amounts due to the Exchequer is a serious example of professional misconduct. In our judgement together with the other charges it warranted a severe reprimand together with singly and in cumulo a finding that Mr Beattie be ineligible for a practising certificate for a period of 7 years. Mr Beattie’s decision to withdraw from practice as a CA means that the public interest is protected by the sanction we selected, as are the interests of the profession. The most severe penalty of excluding Mr Beattie was withheld partly because he had 35 years of previous practice with no criticism or complaint. Additionally we considered that the defender was entitled to recognition for the full acceptance of responsibility which was put forward, the agreed plea and this avoided any contested hearing with further cost and inconvenience.”

Clare Oddie CA

Member Number

M29896

Charges

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found Ms Oddie guilty of professional misconduct on the following grounds:

On or around 12 October 2015, whilst employed as a manager in the Indirect Tax team of KPMG LLP, Ms Oddie acted contrary to the fundamental principles of intergrity (Sections 110.1 and 110.2) and professional behaviour (Section 150.1) of the ICAS Code of Ethics in connection with communications with HMRC over a protective claim for a client in respect of VAT (hereafter “the Claim”) insofar as she:

prepared a letter to HMRC dated 5 August 2015, applying the electronic signature of a former employee of KPMG LLP;

prepared an email to HMRC dated 5 August in the name of the former employee of KPMG LLP; and

deliberately misrepresented to HMRC that the said letter and email were sent to HMRC by the former employee of KPMG LLP on 5 August 2015;

which actions were undertaken in order to convince HMRC that the Claim had been submitted within the applicable timescale, when Ms Oddie knew that the Claim had not been submitted.

Sanction

Under operation of Investigation Regulation 2.16, Ms Oddie has accepted an order of severe reprimand, with a financial penalty in the sum of £5,000 and a requirement to pay the reasonable costs of the investigation.

Commentary

The Committee considered that the charges, which were brought to the attention of ICAS by KPMG LLP, indicated a serious departure from the ethical standards which Chartered Accountants are expected to observe.

With reference to the fundamental ethical principle of integrity (Section 110), Ms Oddie was knowingly associated with communications with she knew were false and misleading, representing behaviour which was neither straightforward, nor honest.

With reference to the fundamental ethical principle of professional behaviour (Section 150), Ms Oddie failed to avoid actions which she knew would discredit the accountancy profession.

In determining an appropriate sanction, the Committee took account of a number of mitigating factors, including: (i) Ms Oddie’s early acceptance of wrongdoing, with expressions of remorse, (ii) the lack of personal gain, with a misguided attempt to deal with an issue for which she was not responsible, and (iii) Ms Oddie’s apparent belief (whether or not correct) that she was acting on the instructions of a more senior employee.

Ms Oddie’s employment with KPMG LLP ended in October 2015 and she is now employed elsewhere in practice.

(August 2016)

Jane Logan CA

Member Number

M19373

Firm/ Employer

Albus Accounting

Charge

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found Jane Logan CA, of Albus Accounting, guilty of unsatisfactory professional conduct on the following grounds:

Between 2011 and November 2015, Mrs Logan engaged in practice whilst not in possession of a practising certificate; in breach of the relevant provisions relating to practising certificates in the ICAS Rules, Bye-laws and Regulations, as amended from time to time.

Sanction

Under operation of Investigation Regulation 2.15, Mrs Logan received a formal written warning with a financial penalty in the sum of £2,000.

Commentary

The ICAS Investigation Committee (“the Committee”) received a referral from the ICAS Public Practice Committee (PPC) in November 2015 to alert it to the fact that Mrs Logan had applied for a practising certificate (PC) and had apologised in her covering letter for being late in her application as she had only recently been alerted to the requirement for a PC from an acquaintance in practice.

The Committee appreciated that Mrs Logan had taken full responsibility for her error and noted that Mrs Logan accepted that her actions constituted a breach of the ICAS Rules, Regulations and Bye-laws which were in place during the period in question.

Whilst the Committee respected Mrs Logan’s transparency and level of co-operation throughout the investigation process it still had to take into account the fact that Mrs Logan had been in practice for four years and had received fees for the work undertaken.

The Committee particularly noted however, that Mrs Logan had voluntarily alerted ICAS to her error and had self-reported her lack of a PC, and as such it considered that her actions could be adequately addressed through the lowest level sanction of a formal written warning with a financial penalty of £2,000.

Leonard Harris CA

Leonard Harris, a member of The Institute of Chartered Accountants of Scotland based in Manchester, has been issued with a severe reprimand following a hearing of the Discipline Tribunal. In addition Mr Harris was ordered to pay the costs of ICAS in the modified sum of £40,000 and the modified costs of the Discipline Tribunal of £10,000.

The Discipline Tribunal found Mr Harris guilty of three charges of professional misconduct in respect that he (1) assisted and supported the director of a company with the transfer of the company’s main asset to another company owned and controlled by the said director, for the consideration of £1, to the detriment or at least the potential detriment of the creditors of the first company and that he did so in the knowledge that said company was unable to avoid insolvency, that the asset had been transferred at undervalue, or at least potentially at undervalue, and that the transaction was intended to avoid any material return to the company’s creditors, contrary to the fundamental principles of integrity, objectivity and professional behaviour contained in the ICAS Code of Ethics; (2) together with his business partner he purchased the entire issued share capital of the new company in order to acquire the assets which had been transferred, to the detriment, or at least the potential detriment of the creditors of the first company, and to his personal gain, all in breach of the fundamental principles of integrity, objectivity and professional behaviour contained in the ICAS Code of Ethics, and (3) he did falsely and dishonestly state in an email to a creditor of the first company that he had no knowledge of the transfer of the client base from that company to the new company prior to the event, in breach of the fundamental principle of integrity contained in the ICAS Code of Ethics.

A subsequent Appeal was refused.

Harpreet Garcha

Member Number

M23360

Firm/ Employer

None

Charge

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found Mr Garcha guilty of professional misconduct on the following grounds:

On 24 November 2015, at Leicester Crown Court, he was, upon confession, convicted on indictment of two counts of fraudulent trading, two counts of transferring criminal property, and five counts of fraud, thereby placing him in breach of the fundamental principles of integrity and professional behaviour in Sections 110.1 and 150.1 of the ICAS Code of Ethics.

Sanction

Under operation of Investigation Regulation 2.16, Mr Garcha has accepted an order excluding him from ICAS Membership, with effect from 3 February 2016.

Commentary

Mr Garcha confirmed to the Committee that he pled guilty to a series of criminal charges at Leicester Crown Court on 24 November 2015.

The charges stem from Mr Garcha’s operation of a property letting business in Northamptonshire, through which he engaged in fraud, fraudulent trading and the transfer of criminal property. Amongst other actions, he falsely misrepresented the value of property maintenance work to clients and insurers.

The Committee was strongly of the view that Mr Garcha’s conduct represents a serious departure from the standards expected of a CA, bringing discredit to him, ICAS and the profession of accountancy.

By failing to be straightforward and honest in all professional and business relationships, Mr Garcha has breached the fundamental ethical principle of integrity. In failing to avoid actions which he knew would discredit the profession, Mr Garcha has breached the fundamental principle of ‘professional behaviour’.

The Committee considered that Mr Garcha’s actions were entirely at odds with the standards of conduct expected of a CA and has agreed his exclusion from Membership accordingly.

(February 2016)

Kenneth Macdonald CA

Member Number

M09906

Firm / Employer

Price & Company Chartered Accountants

Charge

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found Mr Macdonald guilty of professional misconduct on the following grounds:

Between February and April 2013, while engaged on behalf of a client, he failed to adequately address the threat to his objectivity arising from his acting as intermediary in arranging for the client’s will to be revised to include clauses substantially benefiting him and his family. His actions constitute a breach of the fundamental principles of (i) objectivity contained in sections 120 and 280 of the Code of Ethics and (ii) professional behaviour contained in Section 150.1 of the ICAS Code of Ethics.

In April 2013, he accepted a payment of £10,000 from his client in circumstances which constituted a breach of the fundamental principle of professional behaviour contained in section 150.1 of the Code of Ethics.

Sanction

Under operation of Investigation Regulation 2.16, Mr Macdonald has accepted an order of severe reprimand with a financial penalty of £7,500 and a requirement to pay the reasonable costs of the investigation.

Commentary

ICAS received a complaint from a former client of Mr Macdonald concerning his involvement in the re-drafting of her will. While engaged on behalf of the client, Mr Macdonald acted as an intermediary in obtaining her instructions regarding her will and conveying them to a solicitor. The will was changed several times to include provisions substantially benefiting Mr Macdonald and his family. The potential financial benefit was significant. Whilst he was acting as intermediary, legacies of at least £150,000 were discussed together with a potentially significant residual estate being shared between Mr Macdonald and his children. For most of this period Mr Macdonald was the sole point of contact for the client.

After investigation, the Committee agreed with the concerns raised by the complainer that Mr Macdonald had acted unethically. In continuing to act for the client while the will was revised to benefit him and his family, he had failed to manage a self-interest threat to his objectivity. The threat arose from the conflict (or potential conflict) between his own interests and the interests of his client. The Committee considered that Mr Macdonald, as an experienced Chartered Accountant, should have been aware of this conflict and taken steps to manage it in accordance with the requirements of the Code of Ethics.

The Committee also concluded that it was not appropriate for Mr Macdonald to have accepted a payment of £10,000 from the client in circumstances where he was in a position of considerable trust, the client was elderly and vulnerable, the gift was a significant sum of money and there was a lack of other independent advisers to assist her.

The Committee considered that Mr Macdonald’s actions demonstrated a disregard for his ethical obligations and brought the profession of accountancy into disrepute.

(October 2015)

Mohammed Qasim CA

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found Mr Mohammed Qasim of UK Mail Group plc, Birmingham, guilty of professional misconduct on the following grounds:

Between 2009 and 2014, he completed and signed five reports under the Solicitors Regulation Authority's Accounts Rules for a firm of solicitors when he did not satisfy the eligibility requirements set out in Rule 34.1 of the Accounts Rules, in breach of the fundamental principle of 'professional behaviour', as set out in Section 150.1 of the ICAS Code of Ethics.

Mr Qasim has accepted an order of severe reprimand with a financial penalty of £5,000 and a requirement to pay the reasonable costs of the investigation.

(September 2015)

George Watt CA

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found George Watt CA, of G & J Watt Accounting Services, guilty of unsatisfactory professional conduct on the following grounds:

Between 2003 and November 2014, he engaged in practice whilst not in possession of a practising certificate or professional indemnity insurance, in breach of the relevant provisions relating to practising certificates and professional indemnity insurance in the ICAS Rules, Bye-laws and Regulations, as amended from time to time.

Mr Watt received an order of reprimand with a financial penalty in the sum of £1,500.

(May 2015)

Angus Nicolson

Angus Nicolson,
a member based in Stornoway and Glasgow, has been severely reprimanded and
excluded from membership of the Institute of Chartered Accountants of Scotland
following a hearing of the Discipline Tribunal.
In addition, Mr Nicolson was ordered to pay the costs of the Discipline
Tribunal in the sum of £20,700 and the costs of the Institute as taxed by the
Auditor of the Court of Session.

The Discipline
Tribunal found Mr Nicolson guilty of professional misconduct in that he (a)
claimed as an expenses allowance in respect of Schedule E income in his tax
return the purchase of a computer in the sum of £815.45, which sum he reclaimed
as a partnership expense; (b) claimed as an expenses allowance in respect of
Schedule E income for accommodation and food and drink expenses in the sum of
£576.30, which sum was reclaimed as a partnership expense, and (c) claimed as
an expenses allowance in respect of Schedule E income for accommodation and
food and drink expenses in the sum of £132.10, which sum he claimed as a
partnership expense.

Peter Anderson,
Discipline Tribunal Chairman, said that "The Tribunal concluded that the
inclusion in a tax return as charges for which Mr Nicolson had already been
reimbursed was an act which was likely to bring discredit to the member and to
the Institute and to the profession of accountancy. It was not conduct of which anyone would
approve or could be regarded as trivial or unimportant. It is an indicator of actual dishonesty and
is to be regarded as a serious and reprehensible departure from the standards
expected of a competent and reputable chartered accountant. We have taken the view that the Defender (Mr
Nicolson) is untruthful. Fundamental
principle 1 of the ICAS Code of Ethics calls on members of ICAS to behave with
integrity in all professional and business relationships. Integrity implies not merely honesty but fair
dealing and truthfulness.

The Tribunal
concluded that the only appropriate penalty was to exclude Mr Nicolson from
membership of ICAS. His conduct was also
appropriate for the subject of a severe reprimand and that order was also
made. The Defender has no insight or
remorse in relation to the Complaints".

Kenneth Mackenzie CA

In terms of ICAS Rule 13.21, notice is
hereby given that the ICAS Investigation Committee has found Kenneth Mackenzie of
Graham & Co (Accountants) Limited, Glasgow, guilty of unsatisfactory professional
conduct on the grounds of the following self-reported breach:

On 5
November 2013, he signed, on behalf of Graham & Co (Accountants)
Limited ("the Firm"), an audit report for the purposes of Sections
92(1)(b) and (c) of the Companies Act 2006 for a client company, which
action was contrary to the provisions of Section 1214(1) of the Companies
Act 2006, by virtue of the Firm holding office as Company Secretary.

Mr Mackenzie was
issued a formal written warning with a financial penalty of £1,000.

(April 2015)

David Stewart CA

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found David Stewart of Stewart & Co Chartered Accountants, Dundee, guilty of professional incompetence on the following grounds:

In preparing the accounts of a Company, his performance of professional work fell significantly short of the standards expected of a Member in the following respects:

31 January 2011 and 31 January 2012, he lodged with Companies House inaccurate abbreviated accounts for the Company for the years ended 30 April 2010 and 2011 respectively insofar as the figures included for share capital (2011), profit and loss reserves (2010 and 2011) and net assets (2010) were materially
incorrect;

In the accounts for Company for the year ended 30 April 2011, he materially misstated the closing bank balance in breach of paragraph 26 of the ICAS Framework for the Preparation of Accounts; and

He failed to prepare accounts for the Company in accordance with the Financial Reporting Standard for Smaller Entities (Effective April 2008) ("the FRSSE") with reference to the following:

- In the accounts for the year ended 30 April 2011, investment properties were not included in the balance sheet at their
market value,in breach of paragraph 6.51;- No provision was made in the year ended 30 April 2011 for the Company's right to consideration for work carried out but not
yet invoiced, in breach of paragraph 4.1;

- He failed to disclose sufficient details of related party transactions in the accounts
for the year ended 30 April 2011, in breach of paragraph 15.1;

- In the accounts for the year ended 30 April 2010, he included a provision for previously been sold and the provision released at the time; and

- The loss on disposal of a Company property in the year ended 30 April 2011incorrectly included an adjustment for indexation allowance.

Mr Stewart received an order of reprimand with a financial penalty of £2,000.(March, 2015)

Robert Cross CA

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found Robert Cross CA (Member No. 28237, a Member currently employed in practice in Birmingham), guilty of professional misconduct on the following grounds:

Whilst employed as an audit manager by Ernst & Young LLP, he acted contrary to the fundamental principles of integrity (Section 110) and professional behaviour (Section 150) in the ICAS Code of Ethics in connection with an audit opinion for the 2013 financial statements of client company (hereafter
"the Audit Opinion") insofar as:

1. in or around December 2013, he misrepresented that the Audit Opinion had been signed by a responsible individual employed by Ernst & Young in the Republic of Ireland by transferring the signature of the responsible individual from a separate audit opinion; and

2. in or around January 2014, he misrepresented that the Audit Opinion had been signed by a responsible individual employed by Ernst & Young in the Republic of Ireland by forging the signature of the responsible individual;

which actions were undertaken without the knowledge of his employer, when he was aware that, in terms of Regulations 4.01 and 4.04 of the Audit Regulations (2008), issued pursuant to the Companies Acts (as applicable), he was not authorised to sign and/or issue such reports on behalf of Ernst &
Young LLP.

Mr Cross has accepted an order of severe reprimand, with a financial penalty of £5,000 and a requirement to pay the reasonable costs of the investigation.(March, 2015)

James Thomson CA

James Thomson, a member of the Institute of Chartered Accountants of Scotland based in Edinburgh, has been suspended from membership of the Institute for one year and been issued with a severe reprimand following a hearing of the Discipline Tribunal. In addition Mr Thomson was ordered to pay the costs of ICAS in the sum of £4150, and the costs of the Discipline Tribunal of £1400.

Mr Thomson admitted 6 charges of professional misconduct and breaches of professional competence in respect that on charges 1,2, and 3 he failed to submit tax returns for clients for a period of 4 years; in respect of charge 4 he failed to provide his clients with the contact details of his firm’s professional liability insurance; in respect of charge 5 he failed to respond to a letter from new accountants requesting professional clearance in respect of a client and did not provide any of the information requested; and on charge 6 he failed to (i) adequately respond to letters, emails and telephone calls from case officers in the Investigations Department and (ii) attend interviews with the Investigator on 2 occasions.

Peter Anderson, Discipline Board Chairman, said “in relation to the first 3 charges, Mr Thomson’s professional conduct personally in his dealings with his clients and the failure to secure that the necessary tax returns were filed with HMRC by the due dates demonstrated a serious failure of professional competence. The failure to co-operate to any material extent with the staff of ICAS dealing with the complaint and investigation is serious .It is the obligation of any Chartered Accountant to assist ICAS so long as the requests made are reasonable. In this case they were and Mr Thomson’s conduct prevented ICAS from properly administering the best interests of the profession as a whole and its reputation before the public.”

A subsequent appeal was refused.

Scott Langlands CA

In terms of ICAS Rule 13.21, notice is hereby given that the ICAS Investigation Committee has found Scott Langlands CA (a Member in business currently employed as Managing Director of D Brash & Sons Limited), guilty of professional misconduct on the following grounds:

While employed as a manager in private practice providing advisory services to directors in respect of the proposed sale their company, he failed to act in accordance with the fundamental principles of integrity, objectivity and confidentiality, as set out in the ICAS Code of Ethics, insofar as he:

Sent an email to a connected third party containing information in respect of the proposed sale of the company which he knew or ought to have known was confidential, or which he knew or ought to have known should only have been provided on acceptance of a confidentiality undertaking

Provided assistance to a connected third party in relation to the purchase of the company, which assistance included the discussion of information he had acquired while acting on behalf of the directors in connection with the proposed sale of the company to a third party, some of which information he knew or ought to have known was subject to a continuing obligation of confidential.

After declaring a personal interest in purchasing the Company to his Line Manager on 20 August, 2013, he acted on behalf of the directors in connection with the sale of the Company in two instances on 21 August 2013, when he knew or ought to have known that it was not appropriate for him to act:

Mr Langlands has accepted an order of severe reprimand, with a financial penalty of £10,000 and a requirement to pay the reasonable costs of the investigation.